When the leader leaves

Legend. Personality. Character. Icon. Some leaders inspire these titles. They are exceptional personalities that have taken up challenges and delivered. Their achievements are remarkable. Their conduct is exemplary. With such outstanding records, it is difficult to find many of the same kind. That is big challenge. When these leaders leave, for whatever reason, how big will be the gap.

How long will it be before we can fill this gap. In most companies the story is that such leaders are larger than all else. They are the miracle makers. They are the do-it-all fighters. They run the show. They stage the show. They lead show. If they do not show up, what will happen to the show? The show, as we know, must go on. To ensure that companies need to prepare “leaders to be”. Most companies call it succession planning.

We are not just talking about retiring CEOs or C-suite leaders; we are talking about the leaders who leave due to various internal and external factors. AIIR Consulting has some telling statistics. CEO turnover is the highest in the last 20 years with average tenure of a CEO being less than five years.

More than 74 percent of leaders report they are unprepared and lack the training for the challenges they face in their roles. Sixty percent of executives fail within the first 18 months of being promoted or hired. Only 35 percent of organizations have a formalized succession planning process for critical roles.

The last point is a reflection of “leaders to be” negligence that costs companies an arm and leg. According to Society of Human Resource Management, the average cost of a new hire is about USD 4000, and it can take anywhere from 45 to 70 days to fill a position. In addition, it can take another year for them to be fully productive. Imagine the devastation it can cause in terms of productivity and bottomline.

The case for planning for key bench strength that is essential to save the devastation caused by exit of leaders is very strong. Organizations have many challenges that prevent them from investing into the second line of leadership:

1. Insecurity of leaders— The biggest challenge in preparing “leaders to be” are leaders themselves. The mindset of most leaders is that as long as the team member is a follower, the leader will lead. He deliberately keeps knowledge, authority and experience to himself. They feel threatened if a team member gets projection at the higher levels, fearing that he may replace him. Such leaders may talk about succession planning but in practice do everything possible to keep the team as “subordinates”. They do not trust their team. This results in micromanagement. This leads to lack of development of the “leaders to be”.

2. Planning and measuring “leaders to be”— Most organizations rely on one or two tools to look at leadership potential. They take 360 degrees feedbacks and top leaders’ opinions to find the readiness of a person to step up to the leadership ladder. This process is inadequate and has problems of bias. Many leaders emerging from this dip stick research are found wanting once promoted. Most companies are still performance obsessed and assume that the highest performer in the team will be “on merit” promoted to the leadership position. This has led to many what I call LIDs, i.e., leadership immaturity disasters.

These are tough calls that require time and effort but compared to the cost of not having a leader or having a premature and unready leader, it is peanuts. Some ways of developing a holistic and comprehensive succession plan are:

1. Feedback, unbiased and measurable— The “leaders to be” have to have a baseline leadership development assessment. The company should create a potential list of “leaders to be” at all levels and get a 360 degrees leadership assessment done through a reliable consulting house. In order for it to be unbiased the number of respondents should not be selected by the candidate but by HR to ensure a holistic response. This baseline assessment should then be shared with the candidate to create a buy-in for developing his/her leadership potential.

2. In-depth interviews and observations— It is also important to have some indepth interviews with his team, colleagues and seniors. This interview should be done by experts who will be familiar with observing and assessing the story coming out of the respondents’ answers. These two tools should then be turned into a report that assesses the leadership maturity, capability and consequently the readiness of the candidate to takeover the leadership position. This may define the time period needed for each candidate to be ready to lead.

3. Training based on leadership competency development— Leadership is learnership. As the above reports will highlight the gap areas, a leadership development journey needs to be mapped to provide the candidate the development opportunities. These can include specific programs, exposures, studies etc.

4. Acting leadership for some assignments— Nothing like hands-on experience. The most effective leadership readiness tool is to put the candidate on some special project and let him lead it for some duration. Create an effective means of getting feedback on his/her leadership qualities. This would be a great test for actually knowing true potential.

5. Coaching one-on-one— It is also advisable to assign one-to-one executive coaching to him/her for his first year of taking over the leadership reigns. This is very essential as the first year is the most testing one. When a leader knows he has a coach who is only there to make him or her succeed, he or she can really have the confidence to get advice in the most difficult of issues and situation.

The AIIR Consulting reports that 60 percent of executives fail within the first 18 months of being promoted or hired. The direct cost of replacing a failed executive is close to 10x his or her salary.

The rush to promote good performers in leadership position is a make-or-break for companies. Practically, every day we witness an established leader leaving the department and the next high proformer being gleefully promoted in his place. The honeymoon only lasts for a few weeks. The oohs and aahs start reverberating in the department. The glee turns into a grunt and the department that was a smooth sailor becomes beset with conflicts and storms.

In the meantime, as the leader fights his inner battles, the business windows start closing down. As Alexander Fleming said, “The unprepared mind cannot see the outstretched hand of the opportunity.”

Copyright Business Recorder, 2025